Redesigned naira notes for circulation from Dec 15

 The Central Bank of Nigeria (CBN) will start issuing redesigned naira notes from December 15, 2022.

Its Governor Godwin Emefiele told journalists in Abuja that President Muhammadu Buhari has authorised the redesign, production and circulation of new N100, N200, N500 and N1,000 notes.

He said: ‘’The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.’’

He said with the development, the CBN plans to mop up N3.23 trillion from outside the banking system back into bank vaults in 100 days.

According to Emefiele: “As of September 2022, we had N3.23 trillion in circulation out of that N2.73 trillion is outside the vault of the bank, so first of all what we want to do is mop all this 3.23 trillion back into the CBN and take control of money supply and we will begin to see how this will rein in inflation no doubt this will have a positive impact on inflation.

“On the timeline for mopping up, I will say today is 26th, so, we have about six to seven days to the end of October till January 31, 2023, which is almost about 100 days to mop up the old currency out of circulation back to the vault”.

Going forward, the CBN has ordered all Deposit Money Banks (DMB) holding the existing denominations of the currency to “begin returning these notes back to the CBN effective immediately”.

The newly designed currency, he said, “will be released to the banks in the order of First-come-First-serve basis”.

Emefiele called on bank customers “to begin paying into their bank accounts the existing currency to enable them to withdraw the new banknotes once circulation begins in mid-December 2022”.

The present notes, he said, “remain legal tender and should not be rejected as a means of exchange for the purchase of goods and services”.

The reasons for the introduction of new notes, Emefiele said, include significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks.

Another reason is the worsening shortage of clean and fit banknotes with the attendant negative perception of the CBN and increased risk to financial stability.